Postmaster General Anthony Frank said Friday he does not expect another postal rate increase until 1991 and promised that mail deliveries would not be halted on Saturdays to cut costs.
Frank made his remarks while announcing a new Postal Service initiative to promote greater efficiency and better customer relations. Frank also said he expects postal labor unions to contribute by allowing greater flexibility in future contracts.One element of the cost-saving plan is to place "bar codes" on all letters by 1995 for eventual potential savings of billions of dollars. Bar codes, a series of short and tall marks on envelopes, allow faster reading, coding and sorting of incoming mail, helping to hold down labor costs.
In the 1988 spending year, Postal Service revenues hit $35.9 billion with an operating deficit of $597 million. Postal Service operations are required to break even and deficits cannot be funded by taxpayers' dollars. Consequently, the service has budgeted a surplus for 1989 operations.
But stamps will not be more expensive in the near future.
"My best guess is that rates will go up in the first quarter or so of 1991," Frank told a gathering at the National Press Club, "which would be the traditional, three-year interval" since the last rate hike last spring.
Frank would not predict how much of a rate increase would be needed.
He also flatly rejected any suggestion that the Postal Service would stop delivering mail on Saturdays to cut costs.
"One, the American people want and deserve it, and second, we now deliver 500 million pieces of mail a day," Frank said. "If we didn't deliver mail on Saturday, we would face delivering a billion pieces on Monday, and we can't do that."
The new Postal Service program for the 1990s is designed to extend the period of time between rate increases. Frank said the goal could be reached through use of bar codes, which eventually could save up to $5 billion annually, and allowing employees to participate in work-sharing arrangements. The Postal Service also will look into contracting some operations to outside companies.
Controlling labor costs will be vital, Frank said. With more than 760,000 employees, the service is the nation's largest civilian employer.
"Our employees have a right to expect personal respect, job security, good working conditions and wage comparability," Frank said. "But they also have a responsibility," he added.
"I'm going to be asking our employees and their union leaders to consider changes that may not be easy but which will result in a more successful, secure Postal Service in the 1990s," Frank said.
As examples, Frank mentioned paying workers more in expensive areas than in parts of the country where the cost of living is lower.
Changes also are needed in benefits, he added, saying health costs have risen an average 30 percent in the past two years.
In an effort to provide better service, the Postal Service is expanding its program of selling stamps at stores.
"Stamps are now available in 15,000 such locations," Frank said.